The S&P 500 Consumer Discretionary Distribution & Retail index is up nearly 14 per cent this year, roughly keeping pace with the S&P 500’s year-to-date gain. ― Reuters picNEW YORK, June 15 ― Elevated US interest rates are pressuring the US retail sector, where shares of many companies have been dented by months of tight monetary policy while a select few have soared.
“The lower to mid-income segment is getting squeezed because of gas prices and groceries,” said Greg Halter, director of research at Carnegie Investment Counsel. “They feel bad even though the economy is doing well.”The consumer will be in focus next week when the US reports retail sales data on Tuesday. Analysts polled by Reuters expect retail sales to have grown by 0.2 per cent in May.
Halter’s fund has been buying shares of companies such as Walmart, Costco, and TJX Companies whose business models emphasise value for the consumer. Their shares are up 28 per cent, 29 per cent and 16 per cent respectively. Bokeh Capital Partners owns shares of Urban Outfitters, which are up over 20 per cent this year. Kim Forrest, Bokeh's chief investment officer, said Urban Outfitters' strength as a fashion merchandiser has helped the company weather the inflationary environment, adding “people will sacrifice to look good.”